Sterling erased overnight gains and was trading flattish during the London session, seen hovering around 1.2770, which are 1 year lows for the GBPUSD pair.

Earlier in the day, UK unemployment rate improved notably and fell from 4.2% to 4.0%, while analysts had expected the rate to stay unchanged at 4.2%. However, wage growth missed expectations and slowed by a notch to 2.4% and the unemployment claims also failed to surpass estimates and declined only very marginally from 7,800 to 6,200. The pound ticked lower after the numbers.

The greenback is being bid amid the ongoing turmoil in Turkey, which sent the dollar index to 13 month highs on Monday.

The GBPUSD pair is now trading below the lower bound of the declining channel, which is the key resistance for today’s session. It is seen around 1.2860 and if the cable jumps beyond, further relief rally could push the pair back toward the 1.30 level.

On the other hand, the support is located around the current cycle lows at 1.2740 and if not held, bears could target the 1.26 level in the initial reaction.